Which term describes paying back pay to a service member after correcting an underpayment?

• A. Provisional pay
• B. Retroactive pay
• C. Ongoing pay
• D. Per diem

Answer: (B)

Retroactive pay is the term for money paid to correct wages that should have been received in the past. When an underpayment is found, the service member is owed the difference for the prior pay period, and retroactive pay covers that missing amount for the time period in which the error occurred. This is different from provisional pay, which is temporary payment while final calculations are completed, ongoing pay, which is the regular current pay, and per diem, which is a daily expense allowance rather than salary. For example, if a service member was underpaid for January through March and the issue is corrected in April, the retroactive pay would compensate for January–March.